Today, the leading video game developer, Activision Blizzard Inc (ATVI), is selling off sharply after reporting earnings. The company gave light Q4 guidance and delayed the release of two of its larger titles. This news has sent the shares lower by over 15.0% to $65.69 a share. The stock is now trading below its 200-week moving average. This puts the stock in a very weak technical position on the charts and often signals further downside in the near term.
The next major support level for Activision Blizzard (ATVI) stock will be around the $56.00 level. This important support area is where the stock broke out of a 4-month base back in March 2020. Often, when stocks retest their prior breakout levels they will be defended by the institutional crowd. This area also matches up nicely with a major retrace level, this should add strength to the support area. I will be looking at a potential long side trade in Activision Blizzard (ATVI) stock around the $56.00 level.
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